Stakeholder Orientation and Market Impact: Evidence from India

Abstract

This study integrates insights from stakeholder theory and the literature on competitive dynamics and incumbent responses to entry. While research in economics and strategy has examined how market incumbents respond to new entrants, little is known about the heterogeneity in these responses to the entry of a stakeholder-oriented firm; our study addresses this research gap. Findings from a novel, longitudinal dataset of 206 granularly defined pharmaceutical markets in India suggest that stakeholder-oriented firm entry in these markets is associated with an impact on prices and product differentiation with heterogeneous responses from high-end and low-end incumbents. Specifically, entry by a stakeholder-oriented firm results in a reduction in prices and dosage sizes from high-end incumbents, whereas low-end incumbents respond in the opposite direction. Keywords Stakeholder orientation • Market-entry • Incumbent response • Industrial organization • Pharmaceuticals"How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others…."Smith (1759)* Chirantan Chatterjee

Movies, stigma and choice: Evidence from the pharmaceutical industry

“…The first dataset is sourced from the All India Organization of Chemists and Druggists (AIOCD) Pharmatrac TM database, which represents private sales of medicines in India (some 60% of the overall Indian market of medicines according to Adbi et al. (2018a, 2018b, 2022)) across 0.85 million pharmacists and chemists. Available at the firm‐stock keeping unit (SKU) level, our data varies monthly for 79 months from April 2007 to October 2013 and gives us market information for 1428 SKUs in the antipsychotics market.…”

“…To investigate physician prescribing behavior, we turn to monthly IQVIA Prescription Audit data for India from April 2007 to October 2013, which draws around one million prescriptions monthly on an average and collected over eight geographic regions in India. These datasets have now been used in recent work around pharmaceutical economics and market structure in India (Adbi et al., 2018a, 2018b, 2022). All the variables considered are listed in Table 2.…”

“…Another complication is that the regional splits in IQVIA RX data is coarser, between metropolitan and non‐metropolitan regions in North, East, West and South of India; not directly mappable to the regional dimension in AIOCD Pharmatrac. Nonetheless, this data is useful to understand heterogeneity in prescription behavior in India as has recently been investigated in some recent work (Adbi et al., 2018a, 2018b, 2022; Bhaskarabhatla and Chatterjee, 2017). For our paper, we use prescriptions written by psychiatrists in our data since we observed that other physician cohorts were not prescribing antipsychotics.…”

A stakeholder perspective on managing tensions in hybrid organizations: Analyzing fair trade for a sustainable development

“…They highlighted how the corresponding level of engagement of the two counterparts might explain an SE's ability to maintain a balanced logic. In this sense, the business behaviors of SEs must remain stakeholder‐oriented (Adbi et al, 2020). Moreover, it is fundamental for SEs to successfully interact with stakeholders to resolve the tensions inherent to their hybrid nature, enabling them to identify new growth opportunities and develop novel skills that can fulfill their dual missions (Phillips et al, 2019).…”

Value Creation and Firm Innovativeness of Small and Medium-Sized Enterprises in Ogun State, Nigeria

“…Stakeholder orientation is defined as the intent to establish good relationships, even collaboration, with a large variety of stakeholder categories (Li & Zhang, 2020). Stakeholder orientation is the capacity of a company to establish good long-term relationships with a variety of stakeholder categories (Sharma & Vredenburg, 2018), and as such it can be interpreted as a managerial ability to connect both social and environmental engagement and concentration with environmental issues (Adbi, Bhaskarabhatla & Chatterjee, 2020).…”